Nobody, these days, is accusing me of “crying wolf” when it comes to debt settlement companies.
True, as a debt consolidation lawyer who offers Indiana bankruptcy help, I’ve spent two and a half decades explaining, cautioning, even warning my clients and readers about the dangers posed by debt settlement firms. I’ve been warning about the “wolf” offering so-called “debt relief” that so often only makes things worse, much worse, for unfortunate people.
Now, what I haven’t been saying (and what am not saying now) is that filing personal bankruptcy in Indiana is the one-size-fits-all solution for every consumer who needs Indiana debt help. Believe me, after 26 ½ years practicing law, I never deal in absolutes.
Remember, too, that we Indiana bankruptcy lawyers ARE first and foremost debt counselors. In fact, that’s exactly the type of work we do every day of the week. On the other hand, at all five Zuckerberg bankruptcy law offices, we’ve embraced the medical mantra that guides physicians: “Above all, do no harm”. And, I’m sorry to say, harm is exactly what many debt settlement firms are causing. “Peddling relief, (debt settlement) firms put debtors in a deeper hole,” is what the New York Times was saying thirteen years ago!
Finally, this month of May, 2013, the new Consumer Financial Protection Bureau (the federal watchdog agency created in 2007) began to cry wolf for real. The CFPB made its first referral of criminal charges against two debt settlement firms, with one being Mission Settlement Agency in New York.
Mission is accused of swindling more than 1,200 people out of millions of dollars. These were people, remember, who’d turned to them for debt help. How did the swindle work? (My Columbus bankruptcy lawyer colleagues say this is precisely the way they’ve seen many Indiana debt settlement firms work.)
- Mission employees told consumers they had affiliations with the federal government.
- Mission gave prospects phony testimonials about results it had supposedly achieved for former clients
- Mission collected money from consumers but “never paid a single penny to creditors.
“Most of Mission’s customers failed to achieve the reduction of debt that the defendants had promised them, and some of them suffered further declines in their credit ratings, were sued by their creditors, and/or fell into bankruptcy,” the indictment begins.
As lawyers for bankruptcy, we understand all too well shy debtors are tempted to snatch at any straw to get relief. But, in trying to avoid the “big bad B word of bankruptcy”, isn’t it tragic how they fell prey to the “big bad W word wolf” of dishonest debt settlement companies?
Categorised in: Bankruptcy Indiana
This post was written by Mark Zuckerberg